Despite opposition from across the state, a law increasing the tax on home sales — now called the Graduated Percent Fee — will take effect on July 10. New Jersey Realtors, the trade association representing the 55,000 Realtors in the state, stands firm in opposition to this tax increase.
In late June, Governor Phil Murphy signed his final state budget, a record $58.8 billion, for the fiscal year 2026. It calls for $1.2 billion in tax/fee increases in gaming, tobacco and pricier real estate. The state Assembly passed the legislation with a 52-27 vote.
The association has been engaged with the legislature since the idea was proposed earlier this year by Gov. Murphy, communicating how deeply flawed and overly punitive the original proposal was.
“We fought relentlessly to blunt the impact of this proposal and reduce the number of New Jerseyans it would affect,” said Doug Tomson, CEO of New Jersey Realtors. “It was a bad policy when it was introduced, and it remains bad policy today. It sought only to harm the housing market, which has seen no real stability since 2020.”
The Graduated Percent Fee, formerly known as the mansion tax, is now to be paid entirely by the seller on properties over:
- $1 million+: The existing 1% “mansion tax” remains, but the responsibility shifts from the buyer to the seller, amending the 2004 law.
- $2 million+: 2% tax on the seller
- $2.5 million+: 2.5% tax on the seller
- $3 million+: 3% tax on the seller
- $3.5 million and above: 3.5% tax on the seller
New Jersey Realtors strongly condemns the imposition of this tax and warns of the unintended consequences the market will face as a result.
“Even though the measure will only take effect tomorrow, we’ve been seeing the consequences reverberate through the market — at all price points — since the budget was signed,” said Kathy Morin, 2025 New Jersey Realtors president.
The association has already begun discussions with the legislature on repealing parts, or potentially all, of the increased tax.
